Sun Life Financial in Hong Kong has announced the launch of Annuity 100, an investment-linked life insurance product with an annuity option allowing for a range of payment options. Sun Life claims it is the only product in Hong Kong that offers an investment-linked savings and annuity plan with a fixed income stream up to age 100, and a 20-year guarantee period to allow policy beneficiaries to receive the remaining income should the insured die during that period.

Customers will have a choice of four funds to choose from: a European bond fund, a European equity fund, a global equity fund and US equity fund. MFS Investment Management, winner of AsianInvestor magazine's global equity, one-year performance award this year, manages all four funds.

The annuity concept is relatively new to Hong Kong, but Sun Life hope that with the growing awareness that the MPF will not be sufficient for a person's retirement needs, it will gain ground.

"This product has been tailored specifically for the Hong Kong market to take advantage of the low income tax level, allowing larger amounts to be devoted to retirement savings, and the lack of any tax on payouts allowed for greater flexibility in payout options," says Janet De Silva, local CEO of Sun Life Financial. Customers can choose to receive a lump sum on retirement or they can choose one or a mixture of two other options. The accumulated fund can be used to purchase a fixed-income annuity, which provides fixed payments up to age 100. The first 20 years payments are guaranteed. Alternatively a fixed percentage or amount of the fund can be withdrawn and paid to the insured.

De Silva says that Sun Life will continue to aggressively tap the Hong Kong retirement market, which is expected to develop rapidly as Hong Kong's population ages. In 2001, 11% of Hong Kongers were over 65, a figure that will reach 24% by 2031.

"As Hong Kong's population rapidly ages, it is increasingly recognised that the government alone cannot be responsible for ensuring financial security after retirement," says Veronica Wong, managing director of marketing and bancassurance at Sun Life Financial.